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Gertrude Shaw

Roosevelt’s New Plans for Subsidies and
Investigations Won’t Stop Food Profiteers

(22 November 1943)

From Labor Action, Vol. 7 No. 48 (should be 47), 22 November 1943, pp. 1 & 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

For months President Roosevelt has been promising to submit a plan to roll back prices and stop the skyrocketing of the cost of living. The suspense was getting unbearable. At last he has submitted his plan.

It consists of two parts. One was contained in his message to Congress November 1, asking for the continuation of subsidy payments beyond December 31, when the present appropriations end. The other was the appointment a few days later of a committee from the War Labor Board to investigate the rise in the cost of living.

This is all the President has to offer to the people victimized by war-profiteering prices. Can these measures really roll back and hold back the cost of living?

First, let us examine the President’s” appointment of this price-investigating committee.

What Prices Does FDR Mean?

Honest figures on the cost of living are indeed necessary. When the President, in his aforementioned speech to Congress, declares that since 1939 prices have gone up only twenty-six per cent, a worker raises a quizzical eyebrow and wonders what prices the President is talking about.

For, since 1941 – let alone 1939 – the worker is paying on the average fifty to sixty per cent more for food, twenty-five per cent more for rent, and so much more for everything else from clothes and shoes to shoestrings and clothespins, that, considering the sharp decline in the quality of goods, it is (hard to estimate the real increase.

Workers squeezed by the President’s hold-the-line order on wages don’t need the report of his committee on the cost of living. They know what a dollar gets them over the grocer’s counter. If there is more need for statistical proof of run-away prices, the unions have their accountants, statisticians and economists. They have presented plenty of figures to bear out the above situation.

But the best way to expose, while disposing of, the President’s price-investigating committee, is to quote Robert F. Whitney, New York Times Washington correspondent, on the subject:

“This move, coinciding with the decision of the Congress of Industrial Organizations to scrap the Little Steel formula, was interpreted as a ‘delaying action’ which insured retention of that wage program for at least two months.”

So, we see that one-half of the President’s plan is not designed to roll back prices but to hold down wages as long as possible. The CIO leaders very wisely did not fall for Roosevelt’s strategy. They have announced their intention to go ahead with wage demands, beginning with an increase for the steel workers. It is up to the rank and file of labor to put unrelenting pressure on the leaders to continue this good start and not to.yield – as they too often do – to the requests of their “friend” in the White House.

So much for the committee appointed by the President. Now we come to the subsidy program, which is regarded by liberals and labor leaders as the white hope for rolling back prices.

Allen S. Haywood, a vice-president of the CIO, speaking over the radio recently, said:

“For a year or more, labor has been demanding that the government keep faith with it by rolling back living costs. The President has tried to do this through a program of food subsidies, but he has been blocked and obstructed by Congress at every turn.”

Labor leaders persist in calling the congressional kettle black and the presidential pot white, though to normal adult eyes they both look pretty much the same color.

It is true that earlier this year the President appeared to have a tussle with Congress on appropriations for food subsidies. Congress represents the interests and position of the food monopolists, who oppose price fixing. Even though the big farm corporations, big meat packers, big food processors of all kinds are the main recipients of government subsidies – and NOT the small, hard-working farmer – these capitalists consider government subsidies mere chicken feed.

For example, a recent convention of food processors strongly opposed subsidies and acclaimed the “principle of free competition.” See what that means today! With shortages the rule and the demand extremely high, “free competition” would allow prices and profits to zoom even above present lofty heights. That’s what big business in the food industry wants – and Congress aims to please ... big business!

But the President also yields to the power of these interests. He is only making a gesture toward labor in asking for subsidies. He does not really go to town to get them. And this can be easily proved.

Back in May 1943 or thereabouts, the President indicated that it would take around $1,500,000,000 in subsidies to roll prices back to the September 1942 levels. To roll back prices to the September 1942 level from today’s level would take much more – because prices are now much higher.

But in his message to Congress, the President does not fix – nor even mention – a definite sum. He leaves the all-important point of ‘how much’ open, giving Congress the loophole it wants to make only a token appropriation.

However, the real question is: Can the working people actually get any worthwhile relief by this method?

How Are Subsidies Working Now?

We must consider that a subsidy program is now in effect. Subsidies are being paid out by the government to the tune of $800,000,000. Specifically, just what foods are being subsidized?

In his message the President reported that $450,000,000 of the total subsidy payments went to roll back the prices of meat and butter. But for the most part of this year meat was not available – except through the black market. Lately butter also is a precious rarity. And when it is on hand, storekeepers sell only a quarter of a pound, for which the housewife grudgingly pays half a cent or a cent over, making the price of a pound several cents higher than the ceiling. Thus, the civilian consumer has not been benefited very much by that $450,000,000 paid mostly to the meat and butter barons. The President also reported that a subsidy is being paid the dairy farmers to cover the; increased cost of cattle feed – in order to keep down the price of milk and milk products.

But when a housewife pays seventeen cents for a container of Borden’s cottage cheese that a few months ago cost eleven or twelve cents, she can indeed see how the Borden company gains by the government subsidy. She benefits little or nothing by the subsidy.

Similarly the President was proud that “the water had been squeezed out” of the price of cabbage and lettuce. True, the outrageous price of cabbage was deflated – whether due to the presidential squeeze or to other causes. But not so with lettuce, which is priced so high that it must be regarded by a working class family as a delicacy rather than a necessity.

Going from these specific items to the whole cost of living in 1943, while the big boys are gobbling up most of this $800,000,000 government subsidy, prices are continuing upward almost uninterruptedly. That is a reality that must be emphasized.

Why Have False Hopes?

These facts are here presented so that workers shall not have false hopes that the subsidy program will solve the problem of war-profiteering prices.

A broad hint of what is required to control runaway prices is contained in the shameful situation in which the Office of Price Administration makes a study of profits in the canning and packing industries – and then suppresses its findings! How damning the profits of these food monopolists must be if the OPA is not permitted to publish them!

There is only one way to break the power of these enemies of society and to stop their enrichment at the expense of all of us. Capitalists and their friends and politicians are not going to do it. Committees of labor, hardworking farmers and housewives without any representatives of industry and the so-called “public” on them – must be organized and demand the power to fix prices on the basis of examining the books of the big food and farm corporations.

These real representatives of the common people will not be afraid to reveal the extent of war profits. They will not be shy about preventing the rich from getting richer. If prices are to be controlled and the people are to be fed, labor must take charge.

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